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Las Vegas Sands Corp. (LVS) Option Bulls Eye End-of-Week Gains

LVS' December 77.50 call is seeing buy-to-open activity today

by 12/16/2013 1:11 PM
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Las Vegas Sands Corp. (NYSE:LVS) option traders have been upping the bullish ante of late, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the stock's 10-day call/put volume ratio on these exchanges has moved to 2.79 from its Dec. 2 reading of 1.57. What's more, the current ratio ranks in the 94th percentile of its annual range, meaning calls have been bought to open over puts at a near-annual-high clip in recent weeks.

This trend is continuing in today's session, where, at last check, about 11,000 calls had changed hands, compared to fewer than 4,200 puts. One of the more active strikes is the December 77.50 call, which has seen more than 1,300 contracts change hands. A healthy portion of these have done so on the ask side, and implied volatility has jumped 3.6 percentage points, hinting at buy-to-open activity. In other words, speculators are expecting LVS to move north of $77.50 by this Friday's close.

As it turns out, the equity rallied to a fresh five-year peak of $77.91 earlier, before easing back to its current perch at $77.41. While today's burst of positive price action comes after Wells Fargo upped its Macau revenue outlook for December, it's just more of the same for an equity that's tallied a 68% year-to-date gain. Should Las Vegas Sands Corp. (NYSE:LVS) fail to reclaim a perch atop the $77.50 mark before Friday's close, though, the most today's call buyers can lose is the initial premium paid. According to Trade-Alert, the volume-weighted average price for the calls is $0.76 apiece.


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